System and method of automatic insufficient funds notification and overdraft protection

ABSTRACT

A method and program product for conducting business transactions and avoiding inadvertent overdrafts. First, the value of an intended purchase is estimated and an electronic receipt is generated for the estimate. An account identified for payment (e.g., a checking account or a credit card account) is analyzed for sufficient funds and, alerts may be provided whenever the analysis indicates that the account has insufficient funds. As a result of the alert, the purchase may be halted or another form of payment may be selected. Also, total in-store purchases may be estimated and other accounts may be analyzed to determine if, in addition to being overdrawn for the selected account, the transaction is over budget.

CROSS REFERENCE TO RELATED APPLICATIONS

The present invention is a continuation in part of published U.S. patentapplication Ser. No. 10/430,824 (Attorney Docket No. BLD920030021US1),entitled “Point-of-Sale Receipt Electronic Generation” to Joan L.Mitchell et al., filed May 6, 2003 and published Nov. 11, 2004,publication No. 2004/0225567 A1; and related to U.S. Pat. No. 6,883,706B2 (Attorney Docket No. BLD920030020US1), entitled “Point-of-Sale BillAuthentication” to Scott D. Mastie et al., issued Apr. 26, 2005; and topublished U.S. patent application Ser. No. 10/446,204 (Attorney DocketNo. BLD920030019US1), entitled “Expense Accounting Data Management Basedon Electronic Expense Document” to Joan L. Mitchell et al., filed May27, 2003 and published Dec. 2, 2004, publication No. 2004/0243489 A1;all assigned to the assignee of the present invention and incorporatedherein by reference.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention generally relates to business transactions andmore particularly to in-store business transactions and payment of suchin-store business transactions and self service transactions atelectronic Point of Sale kiosks, such as at automated gas pumps and thelike.

2. Background Description

Frequently, new businesses fail because of cash-flow problems and undercapitalization. Often this is because a new business person finds itdifficult tracking business expenses. Also, the typical 30-90 day lagtime between invoicing and payment can cause budgeting problems, evenwhen accounts receivable sufficiently cover ordinary expenses. Bad orbounced checks further deplete business resources and are not reflectedon the balance sheet until marked as a loss. So, while the balance sheetmay indicate that the business is in the black, a large accountsreceivable may leave the business cash poor and unable to meet payrollor pay creditors on time.

Moreover, tracking bills, payments and receipts can be a very timeconsuming process. A business may have multiple employees on expenseaccounts or otherwise spending company money, each too busy to take timeto promptly account for expenditures. Even if business promptly enteredexpenditures and receipts in the books, many businesses only balancetheir financial books/checkbooks once a month. There are a number ofcommercially available accounting software packages to assist smallbusinesses in these complicated and time-consuming accounting tasks.Unfortunately, these off-the-shelf packages depend upon either manuallyentering the data or periodically downloading checking account andcredit card information from multiple accounts.

These types of expenditure problems are not limited to new businesses;individuals and families frequently encounter similar cash flow problemsas well. Financial difficulties arising from these types of monetaryissues can stress a marriage to the breaking point. For example, couplesmay use a joint bank account and have joint credit card accounts;individually drawing on the same account and independently chargingpurchases to their joint accounts. When one or both of the partners islax about recording joint account transactions, the charges may reachthe credit card limit and/or the account may become overdrawn withouteither party realizing the problem. Consequently, outstanding checks canexceed available funds and some may even bounce for insufficient funds.Without available funds, credit card payment due dates may pass withoutpayment, leaving the credit cards unpaid. Bounced checks and missedcredit card payments injure both partners' credit rating. Unfortunately,these bounced checks and missed credit card payments incur largepenalties that further exacerbate the problem, potentially stretching analready tight budget past the breaking point. If, for example, onepartner is susceptible to “impulse buying,” spontaneously makingunplanned purchases, the couples' budget may be blown before the otherpartner is aware of the problem. For these and other reasons, maritalfinances have been named, consistently, the top source of maritalstrife.

Thus, there is a need for notifying individuals and business ofpotential budgetary problems in real time; more particularly, fornotifying the appropriate individual(s) of such potential budgetaryproblems based on estimated spending that accounts are in danger ofbeing overdrawn; and, optionally, preventing parties from overdrawingthe account(s).

SUMMARY OF THE INVENTION

It is therefore a purpose of the invention to reduce inadvertentoverdrafts and unbudgeted/over-budget expenditures;

It is another purpose of this invention to selectively allow businesstransactions to go forward even with insufficient funds in an accountinitially selected for payment;

It is yet another purpose of the invention to reduce inadvertentoverdrafts in point-of-sale terminal purchases.

The present invention is related to a method and program product forconducting business transactions and avoiding inadvertent overdrafts.First, the value of an intended purchase is estimated and an electronicreceipt is generated for the estimate. An account identified for payment(e.g., a checking account or a credit card account) is analyzed forsufficient funds and alerts may be provided whenever the analysisindicates that the account has insufficient funds. As a result of thealert, the purchase may be halted or another form of payment may beselected. Also, total in-store purchases may be estimated and otheraccounts may be analyzed to determine if, in addition to being overdrawnfor the selected account, the transaction is over budget.

BRIEF DESCRIPTION OF THE DRAWINGS

The foregoing and other objects, aspects and advantages will be betterunderstood from the following detailed description of a preferredembodiment of the invention with reference to the drawings, in which:

FIG. 1 shows an example of a preferred point-of-sale (POS) terminalelectronic receipt generation environment, for customer transactingbusiness at POS terminals.

FIG. 2 shows a flow chart example of notifying a business/merchant thatan account is becoming overdrawn by a purchaser/customer in theenvironment of FIG. 1.

FIG. 3 shows a flow chart example providing optional consumer purchaseestimates, wherein a customer estimates the availability of funds.

FIG. 4 shows another flow chart example of an over total budget estimatebased on a purchase estimate.

FIG. 5 shows a flow chart example of optionally providing over-budgetalerts based on the itemized electronic receipt, e.g., as a result of anover total budget estimate.

DESCRIPTION OF PREFERRED EMBODIMENTS

Turning now to the drawings, and more particularly, FIG. 1 shows anexample of a preferred point-of-sale (POS) terminal electronic receiptgeneration environment 10, customer location (i.e., identified with aclient business) 12 and point-of-sale terminal 14 (hereinafter “POSterminal 14”), such as described in published U.S. patent applicationSer. No. 10/430,824 (Attorney Docket No. BLD920030021US1), entitled“Point-of-Sale Electronic Receipt Generation” to Joan L. Mitchell etal., filed May 6, 2003, published Nov. 11, 2004, publication No.2004/0225567 A1, assigned to the assignee of the present invention andincorporated herein by reference. Customer locations 12, e.g., a walletthat includes, for example, cash 16, a check 18, a credit card 20 and/ora smart card 22, or any other suitable well known payment mechanisms forpaying for merchandise, e.g., gift certificates or store credits.Customer location 12 may also communicate with POS terminal 14 using apersonal digital assistant (PDA) 24 or any other suitable handheldcomputer or communication system, with an appropriate communication port(not shown), e.g., infrared (IR) or radio frequency identification(RFID). POS terminal 14 conducts each sales transaction and generates anelectronic receipt 26 for each and, optionally, a conventional paperreceipt 28. According to a preferred embodiment of the presentinvention, individuals, families, and businesses receive real timecash-flow and budget analysis, and as a byproduct of each transaction,improved financial health.

As used herein for example only, a customer, shopper or purchaser (usedinterchangeably) at a customer location 12 is identified with a privateor public concern is conducting a transaction with a merchant or otherbusiness concern. The private concern may be, for example an individualhousehold, a business or other organization or business. Similarly, apublic concern may be, for example, a business or a non-profitorganization. Thus, a customer/purchaser may be a member of thehousehold, a business employee or a member of the organization. The POS14 is located with the business concern 30, e.g., in a bank, on thepremises of a department or grocery store or, is suitably located forelectronic purchases (e-purchases). Further, either or both of thecustomers to the business concern and the private/public concern areproactively alerted or notified of budgetary problems, even fromavailable downloadable information that normally does not includesufficient budgetary detail, e.g., to automatically assign each purchaseto a budget category. Thus, the present invention facilitates budgetcompliance, even when a particular customer is not paying attention tothe effects of individual purchases during shopping, to mitigate theeffects of impulse-buying and other extra-budgeted purchases.

Each POS terminal 14 may be located on customer premises 30, e.g., abank, or be remotely located and include an imager 40, a check/currencyinserter 42, a receipt instruction receiver 46 with a receiptdestination retriever 62, an electronic receipt generator (ERG) 48 withan authenticating data generator (ADG) 50, a transmitter 52 and anyother components (OC) 54. Imager 40 converts cash (paper currency orbills) 16, and/or checks 18 into images 58 that may be inserted bycheck/currency inserter 42 into a paper receipt, 28 an electronicreceipt 26 or both for recordation. Electronic receipt generation andstorage is also described, for example, in published U.S. patentapplication Ser. No. 10/446,204 (Attorney Docket No. BLD920030019US1)entitled “Expense Accounting Data Management Based on Electronic ExpenseDocument” to Joan L. Mitchell et al., filed May 27, 2003, published Dec.2, 2004, publication No. 2004/0243489 A1, assigned to the assignee ofthe present invention and incorporated herein by reference. Receiptinstruction receiver (RIR) 46 may include a destination retriever (DR)62 and receive receipt instructions (RI) 60. Each receipt instruction 60includes a Receipt Destination Identifier (RDI) 64 and a contentinstruction (CI) 66. A receipt instruction 60 reflects communicatedcustomer preferences, e.g., provided verbally and manually entered toPOS terminal 14 or electronically generated. Electronically generatedcustomer preferences may be gathered, for example, from an electronicpayment from, for example, a credit card 20, a smart card 22, a PDA 24or any other suitable electronic payment mechanism.

Each RDI 64 expressly or implicitly indicates where to send acorresponding electronic receipt, if any. An RDI 64 may expressly statea receipt destination 65 as, for example, an Internet protocol (IP)address, a mailing address, an e-mail address, e.g., for a non-volatilestorage. Customer identification may imply a receipt destination 65stored in a receipt destination database 68, e.g., by business name, bycredit card number, by smart card identification, or by PDA based IRcommunications. The destination retriever 62 retrieves implieddestinations from receipt destination database 68. The electronicreceipt generator 48 generates an electronic receipt 26 for eachtransaction, e.g., from date and time; merchant; issuing agent; andmerchant address. Electronic receipts may be in a standard format, e.g.,electronic data interchange (EDI) format or a personalized electronicreceipts 26 based on content instruction 66, e.g., indicated in acontent database 70. Authentication data generator 50 can providetransaction authentication data 72 for confirming that an electronicreceipt 26 has not been altered. For example, authentication data 72 mayinclude receipt contents, date, time, a merchant identification or,biometric data collected from the purchaser. The authentication data 72may be stored at a merchant system 74 for access by receipt destination65 with each receipt 26 or transmitted separately to receipt destination65. The transmitter 52 communicates electronic receipts 26 andauthentication data 72 to receipt destinations 65 and/or merchant system74. Other POS terminal 14 components 54 may include, for example, akeyboard, a central processing unit (CPU), a monitor, a bar codescanner, a telecommunications system, a credit card authenticationsystem, a smart card authentication system, a PDA communications system,RFID detection modules and/or a cash drawer.

Preferably, receipt destination 65 includes an expense accounting system80 such as a customer employer expense reporting system, a customerpersonal expense tracking system (e.g., Quicken®, Microsoft Money®,TurboTax® or a spreadsheet application) and/or a customer accountantexpense tracking system. Each electronic receipt 26 provides immediateinformation for cash flow and budget purposes to expense accountingsystem 80. Also, the expense account system 80 may include an expensecategorizer (EC) 82 categorizing each electronic receipt 26 into anexpense category, e.g., clothing, food, or entertainment. A tax datacollector (TDC) 84 gathers tax related data in electronic receipts 26,e.g., sales tax, deductible expenses, deductible donations, and medicalexpenses. A tax authority (TA) 86 (e.g., the US Internal Revenue Service(IRS), a state tax department, or foreign equivalent thereof) mayprovide tax related information or, tax related information may beotherwise provided. Also, the receipt destination 65 may includeappropriate receipt storage 88 for long term archiving.

FIG. 2 shows a flow chart example 100 of notifying a business concernaccording to a preferred embodiment of the present invention that anaccount may be under-funded and so, not have sufficient funds to cover acurrent transaction, e.g., a purchase or purchases by a purchaser in theenvironment 10 of FIG. 1. Prior to making a purchase, in step 102 thebusiness/merchant may obtain an estimate of each customer's purchases,e.g., at POS terminal 14. In step 104 the POS terminal 14 scans theselected form of payment, e.g., check 18, credit card 20, smart card 22and/or PDA 24. In step 106 the POS 14 generates a temporary electronicreceipt 26, which the POS 14 forwards to the receipt destination 65. Instep 108 the Expense Account System 80, for example, analyzes thecorresponding bank or credit account to determine if the account isunder-funded and, as a result of the current purchase, it may becomeoverdrawn in step 108. A suitable example of using electronic receiptsfor real-time analysis of cash-flow and budgeting is disclosed inpublished U.S. patent application Ser. No. 10/430,824 (Attorney DocketNo. BLD920030021US1) entitled “Point-of-Sale Receipt Generation” to JoanL. Mitchell et al., filed May 6, 2003 and published Nov. 11, 2004,publication No. 2004/0225567 A1.

If in step 110 the corresponding account has sufficient funds orremaining credit to complete the current purchase, then the purchaseproceeds in step 112, e.g., by finalizing the temporary electronicreceipt for the current customer. Otherwise, if the customer isunder-funded in step 108, such that the current purchase exceedscustomer funds and the corresponding account will be overdrawn or acredit limit will be exceeded; then in step 114 the business/merchant isalerted, e.g., by a POS terminal message. Thus, the business/merchantreceives an application alert or another notification when a customerhas exceeded his/her purchasing authority, e.g., is exceeding the budgetor an account will be overdrawn. Then, optionally, in step 116 thecustomer also is notified, e.g., by a message displayed on the creditcard/smart card scanner, or on the PDA 24, and the customer may selectanother form of payment, e.g., cash 16 instead of credit card 20 or adifferent credit card. Thus, overdraft notification enables purchasersto switch the method of payment or transfer funds on-the-fly and in realtime to avoid incurring bounced check and/or overdraft fees. Moreover,the business/merchant avoids the aggravation of collecting bad orbounced checks. Optionally, the respective bank/creditor may offeradditional account protection services, e.g., verifying that thecustomer has subscribed to the service in step 108 and only providing anindication for subscribers. For example, services may be offered to helpindividuals, families and businesses to avoid insufficient funds orover-credit situations that would otherwise arise.

FIG. 3 shows a flow chart example 120 of providing optional consumerpurchase estimates, wherein a customer estimates or calculates thepurchase cost and the availability of funds according to a preferredembodiment of the present invention. In step 122 the purchaser decideswhether to check for sufficient funds or remaining available credit tocover current purchases in one or more accounts. If an estimate isunnecessary, then the purchase proceeds in step 124. Otherwise, in step126 the customer calculates or estimates a total for current purchases.The result is forwarded to the receipt destination 65 and in step 128the Expense Account System 80, for example, analyzes the correspondingbank or credit account in real time. In step 130 the results of thereal-time analysis are returned to the customer to determine if thecurrent purchase exceeds available funds in step 132. If sufficientfunds are available to complete the current purchase in step, then thepurchase proceeds in step 124. Otherwise, if in step 132 the currentpurchase exceeds the available funds such that the corresponding accountwill be overdrawn or the credit limit exceeded; then in step 134 thecustomer is notified, e.g., by a message displayed on the creditcard/smart card scanner, or on the PDA 24, and the customer may selectanother form of payment to complete the purchase in step 124, e.g.,using cash 16 instead of credit card 20. Thus, these alerts enablepurchasers to switch the method of payment or transfer funds on-the-flyand in real time to avoid incurring the bounced check and overdraftfees.

So, for example, upon entering the cashier's line and deciding torequest a purchase estimate in step 122; then in step 126, the customercan forward an expected purchase amount, e.g., an estimate or acalculated amount. For example, the customer can access a bank or creditaccount by cell phone, PDA, or other handheld device (or use amerchant's kiosk such as an ATM machine in a store or on an automatedgas pump) and, enter the expected amount for purchasing the merchandisein step 128. Multiple responses can be returned in step 130 including“OK,” “Borderline” (e.g., within $200 or a certain minimum fundinglimit), and “insufficient funds.” Once the purchase is complete in step124, the expected amount is replaced with the final purchase amount fromthe electronic detailed receipt. Meanwhile other purchasers using thesame account are warned based on the updated available funds, to havecurrent data and avoid secondary over-credit or insufficient fundsinstances. Thus, the public/private concern avoids having compounded theproblem, and may avoid it altogether.

FIG. 4 shows a flow chart example 140 of an over total budget estimatebased on a purchase estimate, substantially similar to the example ofFIG. 3 with like elements labeled identically. Again in step 122 thepurchaser decides whether to check for sufficient funds to cover currentpurchases in one or more accounts. If an estimate is unnecessary, thenin step 124, the purchase proceeds. Otherwise, in step 126 the customerestimates the total for current purchases. The estimate is forwarded tothe receipt destination 65 and in step 142 the Expense Account System80, for example, analyzes the customer's budget in real time. In step144 the results of the real-time analysis are checked to determine ifthe budget will be exceeded as a result of the current purchase. Ifsufficient budgetary resources are available to complete the currentpurchase in step 144, then the purchase proceeds in step 124. Otherwise,if in step 144 the budget or a budget sub-category will be exceeded;then, in step 146 the purchase is halted, e.g., by a message displayedon the credit card/smart card scanner, or on the PDA 24. Optionally, thecustomer may be allowed to select another form of payment to completethe purchase in step 124, e.g., using cash 16 instead of credit card 20,or replenish necessary funds before close-of-business, to preventexpensive insufficient funds situations. Optionally, the customer mayelect to override the budget warning, provided that sufficient fundsexist. For example, it may be unavoidable to exceed fuel budget limits,causing the customer to make other adjustments to cover the purchase andavoid a bounced check, an overdraft or a rejected credit card. Thus,over-budget notification enables individuals/businesses to stop suchpurchases on-the-fly and in real time, also to avoid incurring theresults of an under-funded account, e.g., a bounced check, overdraftfees or an over-credit situation. Also, the customer may adjust budgetedamounts to prevent generating budget alerts.

FIG. 5 shows a flow chart example 150 of optionally providingover-budget alerts based on the itemized electronic receipt, e.g., as aresult of an over total budget estimate 140 of the example of FIG. 4.When the results of account analysis indicate that a current purchaseexceeds a total budget for the private/public concern, in step 152 abudget alert is generated. In response to the alert, in step 154 recentreceipts are scanned. Then, in step 156 the concern's accounts areanalyzed to identify any purchases that have exceeded budget. Finally instep 158, the receipt destination 65 alerts the customer of anyidentified purchases, e.g. to stop or alter the purchases.

Advantageously, purchases can be halted before bouncing checks,incurring overdraft penalties, exceeding credit limits, exceedingbudgetary guidelines or otherwise injuring negatively affecting creditscores and reports. Customers have an accurate, up-to-date accounting ofavailable funds relative to the respective budget. The accounting may beused, for example, for education regarding monthly living expenses.Further, such an accurate up-to-date accounting reduces the likelihoodof inadvertently creating debt by exceeding available funds (e.g., bycheck, credit card, or e-purchase) and may encourage personalresponsibility. With notification provided by the present inventioncustomers can avoid otherwise inadvertent overdrafts and resultingbounced checks, e.g., by aborting purchases or transferring money into adepleted account. A customer can query bank accounts even beforeinitiating a transaction and while waiting in line, e.g., from a PDA,handheld computer, or cell phone and confirm that an estimated orcalculated amount will not exceed available funds. Moreover, merchantscan accept checks verified at a preferred POS terminal according to apreferred embodiment of the present invention without concern that suchchecks may bounce.

Also, the present invention provides immediate purchase verification foran additional level of overdraft protection, e.g., banks may institutean “instant overdraft” option whereby banking customers receiveproactive notice of potentially overdrawn situations. Many bankscurrently offer “overdraft insurance,” that allows individuals toreplenish overdrawn funds, rather than allowing protected accounts to beoverdrawn, bouncing a check. Instead, banks offering “instant overdraft”protection can allow customers to OK an overdraft on-the-spot, e.g., foran appropriate interest charge. Thus, purchases may complete withotherwise rejected checks (even checks that would cause the account tobe overdrawn), e.g., with the customer's promise to replenish theaccount before close-of-business or by the customer funding the purchasefrom another account. Further, such an “instant overdraft” protectionoption provides banks with a new revenue service opportunity, allowing areal-time funds-balance-verification, that may be marketed as afee-based value-add offering, or services related to such an offering.

While the invention has been described in terms of preferredembodiments, those skilled in the art will recognize that the inventioncan be practiced with modification within the spirit and scope of theappended claims. It is intended that all such variations andmodifications fall within the scope of the appended claims. Examples anddrawings are, accordingly, to be regarded as illustrative rather thanrestrictive.

1. A method of conducting business transactions, said method comprisingthe steps of: a) estimating the value of an intended purchase; b)generating an electronic receipt for said intended purchase from theestimate; c) analyzing an account for payment for sufficient funds; andd) selectively providing an alert responsive to an indication that saidaccount has insufficient funds.
 2. A method as in claim 1, wherein thestep (a) of estimating comprises estimating the total value of in-storepurchases for an identified customer.
 3. A method as in claim 2, whereinthe analyzing step (c) further comprises analyzing a plurality ofaccounts to determine whether said intended purchase exceeds a currenttotal budget.
 4. A method as in claim 3, wherein the step (d) ofselectively providing an alert comprises halting said intended purchase.5. A method as in claim 1, wherein the analyzing step (c) furthercomprises analyzing a plurality of accounts to determine whether saidintended purchase exceeds a current total budget.
 6. A method as inclaim 1, wherein the step (d) of selectively providing an alertcomprises halting said intended purchase.
 7. A method as in claim 1,wherein the step (b) of generating said electronic receipt comprisesscanning an intended form of purchase.
 8. A method as in claim 7,wherein said intended form of purchase is selected from one of a check,a credit card and a smart card.
 9. A method as in claim 8, furthercomprising the step of: e) identifying another form of purchaseresponsive to a generated said alert.
 10. A method as in claim 1,further comprising the step of: e) identifying another form of purchaseresponsive to a generated said alert.
 11. A method as in claim 1,wherein said account is a bank account, said method providing overdraftprotection, said method further comprising the step of: e) identifyinganother form of purchase responsive to a generated said alert.
 12. Amethod of providing overdraft protection as in claim 1, wherein the step(c) of analyzing further comprises verifying that the account isidentified with a customer subscribed to an overdraft protectionservice, alerts being provided in step (d) only for overdraft protectionservice subscribers.
 13. A computer program product for conductingbusiness transactions, said computer program product comprising acomputer usable medium having computer readable program code thereon,said computer readable program code comprising: computer program codemeans for receiving estimates of intended purchases; computer programcode means for generating electronic receipts for each receivedestimate; computer program code means for analyzing payment accounts forsufficient funds for covering said each received estimate; and computerprogram code means for providing alerts responsive to an indication thatan account has insufficient funds.
 14. A computer program product forconducting business transactions as in claim 13, wherein said computerprogram code means for estimating comprises computer program code meansfor receiving estimates of the total value of in-store purchases for anidentified customer.
 15. A computer program product for conductingbusiness transactions as in claim 13, wherein the computer readableprogram code means for analyzing comprises: computer program code meansfor analyzing a plurality of accounts; and computer program code meansfor determining whether said intended purchase exceeds a current totalbudget.
 16. A computer program product for conducting businesstransactions as in claim 13, wherein the computer program code means forproviding an alert comprises computer program code means for haltingsaid intended purchase.
 17. A computer program product for conductingbusiness transactions as in claim 13, wherein the computer program codemeans for generating said electronic receipts comprises computer programcode means for receiving scans of intended forms of purchase.
 18. Acomputer program product for conducting business transactions as inclaim 17, wherein said intended forms of purchase include checks drawingon a checking account, a credit card for a credit card account and asmart card.
 19. A computer program product for conducting businesstransactions as in claim 13, further comprising: computer program codemeans for identifying an alternate payment account.
 20. A computerprogram product for conducting business transactions as in claim 13,wherein the computer program code means for analyzing verifies that bankaccounts are identified with customers subscribed to an overdraftprotection service, and said computer program code means for providingalerts provides alerts only for overdraft protection servicesubscribers.